Bill for upgrade flows over budget

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More than $400,000 extra cash will be poured by Horowhenua District Council into making Shannon's town water drinkable.

It is a council trying to account for where hundreds of thousands of dollars its predecessor had saved for the upgrade evaporated to.

The council voted last night to approve the $420,150 needed to complete the upgrade of the Shannon Water Treatment Plant. This brought the cost of the project up from $2.97 million to $3.39m.

The bulk of the upgrade is funded through a $2.1m subsidy from the Ministry of Health.

Cr Ross Campbell, from Shannon, raised several concerns he had about the extra expense and said he was unhappy about signing it off without extra information.

Council chief executive David Clapperton said there was no alternative option as the work was already being done and he would soon have to sign the bills that came across his desk.

"You'll notice there is no alternative option, we've got a project that is almost finished and we've determined we've gone over budget."

Two submitters to the council meeting asked why levies collected for 11 years by the old Shannon Borough Council for Shannon's water system were not spent on the upgrade.

It is unclear how much money was collected by the borough council though the figure has been put at in excess of $2m.

When the council harmonised its water rates in 2008, meaning the costs of water infrastructure were shared across the district instead of being paid for individually by each town, there was about $350,000 in the Shannon water account.

That was put into a trust fund to be spent on things that would benefit Shannon.

In 2010 Shannon Community Action Group member Judy Drake said about $638,000 had been spent from the water fund on investigations into options for Shannon.

Christina Paton told the council last night it made sense to use that money now to pay for Shannon's water upgrade.

"It does not make sense to me, as an observer, that the people of Shannon now have to virtually compete to get a benefit from a sum of money that was collected for one specific purpose, water supply."

To date the council has been unable to account for where the money in the slush fund went.

However, that could change. Last night Mr Clapperton said the council staff would go back through 24 years of financial records shared over three computer systems and interview former staff to work out where the money went.

"I'm prepared to do that," he said. "It's not a task you can do in a day."

In fact the exercise would cost approximately $14,000 and take 24 days to complete, he said. The council would provide a breakdown of where the money had gone once it had the information, he said.